In online advertising, widely known two advertising methods are CPC (Cost Per Click) and CPM (Cost per thousand impressions). In the CPC method, advertiser pays a fixed or variable $ amount per each click its site receives. In the CPM method, advertiser pays a set or variable $ amount per 1000 impressions its advertisement (banner, contextual, etc.) is shown regardless of CTR (Click Through Rates). There are many advertising venues in the market which sell both CPC and CPM methods, some to name; Google Adwords, Yahoo Search Marketing, MSN AdCenter, etc. What is CPA ? Compared to CPC and CPM methods, CPA is a newer advertising model. CPA is called “Cost per Action” or “Cost per Acquisition”. In the CPA method, advertiser doesn’t pay for the impression or click. Advertiser pays when an action is taken by visitor. Here are some popular CPA advertising offer types: * User registers for the website/service (free or paid). * User buys something (also called as CPS, cost per sale). * User fills a short form (short survey, email, zip code, state, etc.) * User fills a long form (insurance quote, long survey, school information, etc.) * User registers for free trial (blockbuster, email marketing software, etc.) Depending on the offer type advertiser sets a fixed $ amount per action. Advertisers either run an inhouse affiliate team and program or go to affiliate marketing companies. In a higher level, affiliate marketing companies are the ones doing the CPA Arbitrage. But, affiliates also known as affiliate marketers sign up with affiliate marketing companies and promote the offer. Let’s show this with an example: Blockbuster would like to do a CPA advertising campaign. They are ready to pay $80.00 per “free 30 days subscription”. Since they have the historical data on how 30 days free subscriptions work, they are happy with the amount they are willing to pay. They will win in this situation. (p.s. $ amounts are not related to blockbuster, they are given as an example). Blockbuster doesn’t want to deal with every average Joe (this is a regular affiliate marketer). Therefore, bigger affiliate companies go to Blockbuster and promise certain level of volume (subscription numbers). Before or after going public with the offer, these large affiliate companies offer these offers to smaller affiliate companies with a lower payout (see the CPA arbitrage starting). Here’s a quick diagram I’ve drawn to visualize the CPA arbitrage in general: Don't Buy CPA Arbitrage Conspiracy | John Cow dot Com Got this email from my buddy Jerry West and thought i would share it this is one guy I 100% trust and if he says no then i have to ot this email from my buddy Jerry West and thought i would share it… this is one guy I 100% trust and if he says no… then i have to believe he has a damn good reason why. I was going to keep quiet about this, but with all the emails going out about “The Arbitrage Conspiracy” … and how their “cart” is opening today at 3pm, well, it is time that someone who was actually there talks honestly about the program. I will be giving my FULL review in my FREE newsletter later this week, so make sure you are signed up. You can go to: http://www.webmarketingnow.com/ and the sign-up box is in the upper right hand corner. Here is the brief review: DON’T BUY THE COURSE!!! Don’t get sucked into the hype. It isn’t real. I was there and I walked out after 40 minutes because the material was very basic. I even talked to many people (other solid CPA marketers) who stayed for the entire presentation and they said there wasn’t anything new, it was all recycled material from past systems. If you want to really know how the CPA (Cost Per Action) market works and the DARK side of it, I will be coming out with a free course by the end of the year. No strings attached. I feel that passionate about this. This is another “launch” that over 90% of the people who sign-up will fail because it does not meet the expectations the marketing message created. CPA is a tough business and you can lose your shirt if you don’t fully understand it. Today’s release of Google’s Cost-Per-Action (CPA) beta has generated a lot of attention. Most are focusing on the impact on affiliate networks such as Commission Junction or Link Share as the test is currently confined to Adsense ads that show up on the Google Publisher Network. I wrote a post about how to set up a campaign on Google’s pay per action (PPA) beta network. There wasn’t much interest in the post and the service in general, but I saw this as a huge opportunity. I have been running many PPA campaigns every day since then and making solid money off of the program. Unfortunately the service is ended in August, but it was great while it lasted. Here’s what I did, and hopefully it provides a concrete example of thinking outside the box. Since you can arbitrage anything I got to thinking why not do an offer to offer arbitrage. The idea was basically a PPA to CPA arbitrage, essentially just CPA to CPA. The beauty of the PPA/CPA system is that it puts the burden of advertising on the publishers, in this case Adsense publishers. You set your conversion action amount you are willing to pay that publisher for brining you the sale. The number of clicks are irrelevant because you don’t pay for them (but more on that later). So in this example I had a CPA offer that paid $12 per lead. I set the PPA action amount for $7. So for each completed lead I netted $5 after giving $7 to the adsense publisher. The high payout generated a lot of action for publishers, I tried lower amounts but that led to less interest by publishers. Now the big problem with this type of setup is technical. You have to have a white label or self hosted offer, because the action confirmation code Google used need to be a static and final confirmation page. The dynamic pages that most affilite networks use to place normal Google tracking code or other pixels did not work for the PPA network code. Luckily I had an offer I could have total control over, so this worked. So how did it go? Very well. Once publishers started running the ad the clicks started pouring in. Since the action amount was higher than most, a lot of people tried it. The conversion rate was low, but that wasn’t where the majority of the money was made. Which brings us to the part about the free clicks. Finding a way to monetize the free (non converting) traffic is the key to the whole thing. The defined action was not the only exit point on the landing page. There was a small email signup link to grab double opted in emails for future selling. There were thousands of clicks coming into that page that didn’t convert well on the primary action, but did sign up for the email. Then I was able to convert these free clicks into sales via newsletters. In fact, when I calculated a CPC cost, using the paid out actions I was charged for against the free clicks - I was effectively paying .002 a click. That’s over 100,000 Google clicks for $200 Even though the Google PPA network is gone, there are lots of similar things you can do like this (not the Google Conversion Optimizer though, because that does charge you for all clicks). Hopefully lightbulbs are going off in your I’m waiting for the other shoe to drop. The next logical step is to have these CPA ads show up as Adwords next to Google’s search results. This presents a direct and present threat to many lead gen businesses, especially those that rely on CPC to CPA arbitrage as their business. I posted on the future of lead gen in January, where I noted that, simplifying substantially, lead gen comprises three processes: 1. Acquiring traffic (e.g. from paid search, organic search, brand advertising, banner advertising, distribution deals etc). 2. Converting traffic to leads through a form-fill process 3. Finding the highest value for a lead among multiple buyers (ie having a network of advertisers and knowing who placed what value on each lead) Google’s current beta will essentially eliminate the arbitrage opportunities in part one of this value chain. Companies driving the majority of their traffic from organic search and (long term) distribution deals will be less affected, as will those who add value to the process by qualifying users and directing them to the best matched vendors as leads. But those whose core competencies are in clever media buying will be pressured because a CPA model shifts the risk out of buying CPC and CPM media and converting to lead forms. There are a large number of lead gen companies that have grown to over $100m in revenue. These have grown to their current size by being well managed, and building multiple sources of traffic and an efficient mechanism for matching leads to their highest value. Smaller “mom and pop” lead gen shops that depending on buying traffic through banner advertising and CPC advertising to landing pages and selling these leads to a small network of buyers will find their margins under increasing pressure if their clients can disintermediate them through Google’s new products. UPDATE: Some very insightful responses posted in comments that I will attempt to summarize as “you’re assuming more efficiency exists than actually does, thats why this will still create a lot of value”. Its a fair point. If you read this in RSS, its worth reading the comments. What is CPA Arbitrage & Methods of CPA Arbitrage 9 Dec 2008 What is CPA Arbitrage & Methods of CPA Arbitrage Discussed with real life examples. PPC Arbitrage, Media Buying, and other topics covered in Google CPA will crunch lead gen arbitrageurs margins further This presents a direct and present threat to many lead gen businesses, especially those that rely on CPC to CPA arbitrage as their business. CPA Arbitrage - What CPA Marketers Don't Want You To Know CPA Arbitrage Scam Exposed? Read the full review before you buy. Shocking results that will change your view 180 degrees on internet marketing and CPA. I’ve had a sneak peek at the CPA Arbitrage material and I found it to be really good. It lays down in simple terms the fundamentals if you’re new to CPA marketing, it gives a bunch of tips and templates of how to get into CPA networks (which is not a trivial thing). It has some well known methods of traffic generation as well as some CPA-specific tricks. What you will get with the CPA Arbitrage System : - Comprehensive material that will teach you everything about CPA - How to make Up To 300% commissions, selling other people’s products - Teaches you CPA not only from the affiliate point of view, but publisher’s as well - How to get 7,000 - 8,000 new leads every day through the power of CPA - Make money WITHOUT having to sell anything - How to get accepted onto any CPA network EASILY! - Which CPA offers you should be choosing if you want to make BIG money - The best ways to drive traffic to CPA offers! CPA offers are becoming the biggest, most talked about subject right now. So get your copy of CPA Arbitrage today and start making easy money through CPA programs. Chris Cobb's CPA Arbitrage - is just hype ? | CPA Arbitrage Review I have just received a small review copy of the CPA Arbitrage. The first thing that came in my mind was .. is this a good product ? or just another Full of. The CPA to CPA arbitrage play | CDF Networks Back in June 07 I wrote a post about how to set up a campaign on Google's pay per action (PPA) beta network. There wasn't much interest in the post and the. CPA Arbitrage Review | Super CPA Arbitrage Bonus cpa arbitrage I won't assume that everybody who reads this post knows precisely what CPA marketing means and so I'll start with a quick overview that CPA Arbitrage Review | $497 CPA Bonus! 29 Apr 2009 Is CPA Arbitrage a SCAM? CPA Arbitrage will show you how Chris Cobb generate $1512050.00 with CPA affiliate marketing and how he built a Cpa Arbitrage - Forex Reviews|Warcraft Guides|Free Website Templates 26 Mar 2009 Cpa Arbitrage - Forex Reviews|Warcraft Guides|Free Website Templates. 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